Business Week--FedEx Corp. (FDX) (FDX) will have to fend off competition from United Parcel Service Inc. (UPS) (UPS) to keep a contract valued at more than $1 billion with its largest customer, the money-losing U.S. Postal Service.

The agreement generates more than 3 percent (FDX) of FedEx’s sales, according to data compiled by Bloomberg, and covers shipping of first class, priority and express mail. UPS “definitely wants to bid” for that work when the Postal Service seeks proposals after the contract’s expiration in September 2013, said Norman Black, a company spokesman. Read more!